I think this is a hardware problem and not a vegas problem.
I have been using vegas for about 3 years now and use a delta 10/10 for
ad/da converting. The delta 10/10 is full duplex, meaning you can play and record at the same time, and monitor/mix what you record. The 10/10 comes with mixing software to rout and set in/out levels.
I can hear no latency, and have total control over mixing.
If your hard ware doesnt come with some kind of mixing and routing software, It is probably not full duplex.
I have a freind that runs pro tools on a pc, and has seen how easy and stable my system is. He wishes he didnt waste his money because his system crashes and is hard to use. He did this because he got a lexicon reverb plugin with it...LOL. (I use an external Lexicon).
I am not trying to sell a delta 10/10, but I will tell you that if you purchase pro tools, and dont use it on a mac computer, you are making a mistake. Pro tools is very expensave and complicated to use. It also was made for mac computers and some times has problems on a pc.
I have tryed to crash my system, trying all kinds of strange things over the years, and I must say,
Sonic foundry has been the most stable and the easest to use.
Also I try to only purchase sonic foundry software to keep compatability,
and thus making a stable running system.
I have tryed this mix and match software, and hardware, and have said alot of sware words in the process, and have lost time and money.
I use to use a motu 2408 for ad/da converting, and had this mixing problem you both speak of because the mixing software was for a mac and would only partialy work on a pc.
I got mad at this motu (made for mac) and sold it to a mac user...LOL
I found the 10/10, that came with vegas audio, and decided to try it.
I now use Vegas audio, Soundforage5.0, acid, cd architect, Noise reduction, and Batch converter and every effect that sonicfoundry has to offer.
My computer is dedicated for recording, and i dont even put it on line like the one i am using now
I spent thousands of dollars before I found this very stable PC recording system.
And to think i almost purchased a mac...LOL

My hardware does have mixing/rounting/input monitoring features. The latency I speak of is minor - but I can detect it. Some may not even notice it or consider it a problem. Using these methods to monitor recording is not the preferred way as punching in will not work as it should (unless there is something I am not aware of). A *real* multitrack recording setup will mute your monitor of the overdub track until you are *punched-in* and mute again when you are back out. I do not see how hardware monitoring on your soundcard and the current version of Vegas can do this. When Vegas adds ASIO support in the next version this should be possible. I still predict you will hear latency though this is a different issue. But as far as *true* record monitoring goes, it is a software issue (soon to be addressed).

When I mentioned Pro Tools I was referring to the real hardware DSP version and not the native crap. This version is much more expensive but has extremely low latency and true input monitoring. Don't get me wrong, Vegas is a great product and the limitations are mostly due to the fact that you are using the PC's processor for DSP and NOT external dedicated DSP designed specifically for digital audio multitrack recording. I hope to make things work with Vegas though I am concerned about these things. Also, some of us are not content to use only SF plug-ins (Waves Platinum is a must have for me) and I sometimes actually route tracks out to external gear and back to the PC as there are just some things you can't do well with what's available in a plug-in today. The current version of Vegas is difficult to do this with at best.

Again, I think Vegas is great considering the platform it runs on and the price. I am looking forward to the ASIO version and hope to stick with the product. I may however, be forced to invest in a much more expensive system if I cannot get things to work the way I want them to.

lets just hope for tape style " auto input" in the next version of vegas